It can be difficult to pay off your debt and manage your finances if you deal with various banks, credit card companies and financial institutions. If you are struggling to manage and pay off your debt due to high interest loans and disorganized finances, you may want to consider debt consolidation.
Debt consolidation refers to putting all your debts, including credit card bills, bank loans and more into one monthly payment. This monthly payment allows you to save money on interest, and can help to simplify your payments because they are all available in one location. Debt consolidation is increasing in popularity because it allows people to save money on interest which they can use to pay down their debt easily and responsibly. Keep reading to find out more about debt consolidation and if it might be a good option for you.
Debt Consolidation Options
If you think that debt consolidation may be a good option for your situation, you will need to do your research. You should first seek out a qualified debt consolidation agent that can help you determine if you are eligible and what the best option may be for you. Debt consolidation can allow you to lower your overall cost of credit by combining your debt through a home equity loan or line of credit. A home equity loan involves the loan being advanced upfront by the lender. A home equity credit line provides a loan that you can access when needed. When you secure a home equity loan or home equity line of credit you are legally putting your house up as collateral, which means that if you are unable to make your payments on time your home may be seized by the lending company.
What to Look for in Debt Consolidation Companies
It is extremely important to do your research and due diligence when choosing a debt consolidation company. You should ensure that the debt consolidation company that you use is compliant with the rules and regulations set forth by the Federal Trade Commission. Make sure that the debt consolidation company that you work with is upfront and discloses the required information before having you sign. Look for certification from the following:
- American Fair Credit Council
- International Association of Professional Debt Arbitrators (IAPDA)
- United States Organizations for Bankruptcy Alternatives (USOBA)
When choosing a debt consolidation company, you should also look for companies that offer services and solutions to help you stay out of debt and manage your finances.
Credit Counseling Services
If you are interested in debt consolidation you should contact a credit counseling service that is accredited by the following organizations:
- National Foundation for Credit Counseling (NFCC)
- Financial Counseling Association of America (FCAA)
It is important to know that you have resources available to you if you have an issue with a lender regarding debt consolidation. You can submit a complaint regarding a lender to Consumer Financial Protection Bureau.
Debt consolidation can allow you to pay back your debt responsibly while saving money on interest and service fees. It is important to make sure that you understand the risks associated with debt consolidation- including the fact that if you miss payments you may lose your house. If you believe that debt consolidation is a good option for you, do your research to find the right company that is properly certified and meets your specific needs.